Question
Which of the following statements about the Fed measures to control money supply is FALSE ? a. Increasing the reserve requirement will lead to an
Which of the following statements about the Fed measures to control money supply is FALSE?
a. | Increasing the reserve requirement will lead to an increase in money supply | |
b. | When the Fed wants to decrease the money supply, it sells government securities to the public | |
c. | Open-market operations is the Fed's most commonly used tool to regulate money supply | |
d. | Increasing the discount rate discourages banks from borrowing, thus reducing the number of available loans | |
e. | The reserve requirement refers to the percentage of a commercial bank's checking and savings accounts that must be physically kept in reserve |
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